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Judgment
PER RAMIT KOCHAR, AM:
This appeal in ITA No. 1430/Del/2026 for Assessment Year: 2020-21 has arisen form the learned CIT(A)’s appellate order u/s 250 of the Income-tax Act, 1961(in Short “1961 Act”) dated 19.09.2025 in DIN & Order No: ITBA/NFAC/S/250/2025-26/ 1080939638(1), which in turn has arisen from the assessment order dated 04.03.2025 passed by the AO u/s 147 r.w.s. 144B of the 1961 Act.
At the outset, it is observed that this appeal is filed belatedly by the assessee with delay of 71 days beyond the time stipulated u/s 253(3) of the 1961 Act. The assessee has duly filed application for condonation of delay . In the said application filed by the assessee, It is averred that the assessee is an aged old person. It is averred that he missed the email sent by the department which contained appellate order passed by ld. CIT(A) . It is averred that he being quite ignorant of mail, and the family members also missed the same. It was further averred that the counsel of the assessee while checking the income-tax portal in January, 2026 , came to know about the appellate order passed by ld. CIT(A), and assessee was informed by the counsel. Thereafter , immediate steps were taken to file this appeal with ITAT. It is further stated that great irreparable damage will be caused to him if the delay in filing this appeal is not condoned. It is prayed in his application that delay of 83 days ( ought to be 71 days as per amended provision in the 1961 Act) in filing this appeal belatedly beyond the time prescribed u/s 253(3) be condoned.
The ld. Sr. DR objected to the condonation of delay , but fairly stated that Bench may take a view based on entire facts and circumstances of the case.
After hearing both the parties and going through the contents of the condonation application filed by the assessee and other materials on record, I condone the delay of 71 days in filing this appeal belatedly by the assessee beyond the time prescribed u/s 253(3) of the 1961 Act, and proceed to adjudicate this appeal on merits in accordance with law. When substantial justice is pitted against the technicalities, the Courts will lean towards advancement of substantial justice unless malice is at writ large or there is gross negligence on the part of the assessee. I donot find any malice on the part of the assessee nor any gross negligence on the part of the assessee in filing this appeal belatedly, as the assessee is not likely to gain anything by filing this appeal belatedly with the Tribunal. Reliance is placed on the decision of the Hon’ble Supreme Court in the case of Collector, Land Acqusition, Anantnag v. Mst. Katiji & Ors. 1987(2) SCC 107.
The brief facts of the case are that the assessee has not filed return of income u/s 139 for the impugned assessment year. In this case, the AO has received specific information flagged by the insight portal under High Risk CRIU/VRU that the assessee along with seven co-owners sold a property measuring 20 Kanal and 15 Marla ( assessee share 2.31 kanal) for a total consideration of Rs. 4,10,92,000/- , vide agreement to sale and purchase dated 13.02.2018. Further, the agreement was registered vide two sale deeds dated 20.01.2020 and 22.09.2022. The AO observed that accordingly the assessee has entered into the following transaction:
| S.No. | Share in the property(in Kanal) | Sale Consideration as per rate of agreement | Amount Received through Bank | Amount received in cash |
| 1 | 2.3 | Rs. 45,65,250/- | Rs. 14,86,875/- | Rs. 30,78,375/- |
The AO issued notice u/s 148A(b) , dated 08.03.2024 of the 1961 Act to the assessee. The assessee did not file any response to the said notice. The AO concluded that income has escaped assessment in terms of Section 147 of the 1961 Act, and it is a fit case for issuance of notice u/s 148 . The AO accordingly issued notice dated 20.03.2024 u/s 148 to the assessee. Statutory notices u/s 142(1) ,143(2) and SCN were issued by the AO from time to time during reassessment proceedings(details mentioned by AO in page 2-3 of reassessment order) . The assessee filed return of income in response to notice u/s 148 on 24.12.2024. The assessee during the year had income from bank interest and capital gains from sale of land, as per return of income filed with department in pursuance to notice u/s 148. The AO after considering submissions of the assessee concluded that as per information available with department, the deal of the property sold by the assessee along with co-owners were initially fixed for a total consideration of Rs. 4,55,23,750/- at the rate of Rs. 1.58 crores per acres with Sh. Sahab Khan(7/10 share) and Sh. Abdul Wahid(3/10 share) . The same is duly reflected in the agreement to sale and purchase dated 13.02.2018 made between the two parties, which agreement dated 13.02.2018 was in possession of the department. However, after 2-3 months Shri Abdul Wahid exited from the deal and the whole property was purchased by Sh. Sahab Khan. Further due to death of Smt. Trishlauf Mithla, her share in the property could not be sold. As a result, the said property measuring 20 kanal and 15 Marla was sold for a total consideration of Rs. 4,10,92,000/- The said property was transferred in the name of Mrs. Majidan W/o Mr. Sahab Khan vide two sale deeds dated 20.01.2020 and 22.09.2022. The assessee on its part denied to have entered into said agreement to sale and purchase dated 13.02.2018, which agreement was in the possession of the department. The assessee claimed the said property was sold for Rs. 1,18,51,875/- vide registered sale deeds. The AO rejected the contentions of the assessee, and brought to tax capital gains by relying on the sale consideration as per rates mentioned in the agreement to sale and purchase dated 13.02.2018 , tabulated as under:
| S.No. | Share in the property(in Kanal) | Sale Consideration as per rate of agreement | Amount Received through Bank | Amount received in cash |
| 1 | 2.3 | Rs. 45,65,250/- | Rs. 14,86,875/- | Rs. 30,78,375/- |
Thus, the AO considered sale consideration of Rs. 45,65,250/- and the indexed cost of acquisition of the said property to the tune of Rs. 1,90,289/- , and accordingly bring to tax long term capital gains to the tune of Rs. 43,74,961/- , instead of Rs. 11,26,586/- as disclosed by the assessee in his return of income filed with department in response to notice u/s 148. Thus, the AO brought to tax undisclosed long term capital gains to the tune of Rs. 32,48,375-/- by adding the same to the income of the assessee.
Being Aggrieved, the assessee filed first appeal with Ld. CIT(A), but there was no compliances by the assessee to as many as three notices issued by the Ld. CIT(A). The ld. CIT(A) passed an ex-parte order dismissing the appeal of the assessee and upholding the assessment order , wherein operating part of the appellate order passed by ld. CIT(A) reads as under:-
“4.5There was no response received to the notices issued during the appellate proceedings as per records available. Also, the appellant has not submitted any letter seeking adjournment in response to notices issued. In view of the above, I am of the considered opinion that the assessee is not seriously interested in persuing the appeal. The law aids those who are vigilant, not those who sleep upon their rights. This principle if embodies in well known dictum , “VIGILANTIBUS ET NON DORMIENTIBUS SERVIUNT LEGES”. Considering the facts and circumstances of the case as no evidence/material was produced by the appellant in support of grounds of appeal, inspite of according sufficient opportunities, the appeal is dismissed.
4.6Without prejudice to the above, it is further stated that the records available have been perused including statement of facts and grounds of appeal and material on record. The material on record is not sufficient to allow any relief to the appellant. In view of the above, the appeal is decided on the basis of available records and addition made by the Assessing Officer in the assessment order u/s 147 r.w.s. 144B for A.Y.2020-21 dated 04.03.2025 amounting to Rs. 32,78,505/-as undisclosed LTCG is confirmed.
5.0In the result, the appeal of the appellant is dismissed.”
Still Aggrieved, the assessee has filed second appeal with the Tribunal. The Ld. Counsel for the assessee submitted that the ld. CIT(A) has passed an ex-parte appellate order. The ld. Counsel for the assessee also reiterated and denied having entered into the aforesaid agreement to sale and purchase dated 13.02.2018. The ld. Counsel for the assessee submitted that department is not having original agreement to sale and purchase dated 13.02.2018, and no additions could be made based on photocopy of the said agreement possessed by department. The ld. Counsel for the assessee also drew attention to legal and jurisdictional grounds raised by the assessee.
Ld. Sr. DR submitted that the assessee did not comply with the notices issued by ld. CIT(A), which led to an ex-parte order framed by ld. CIT(A). Thus, the assessee is responsible for its woes. It was submitted that matter can be restored back to the file of ld. CIT(A) ,and the assessee can make its representation/arguments before ld. CIT(A).
I have considered the rival contentions and perused the materials available on record. The brief facts of the case as well contentions of both the parties are recorded in the preceding para’s of this order and are not repeated. I have observed that the ld. CIT(A) has not decided the issues arising in the appeal by independent application of mind and by making any enquiry, and has simply dismissed the appeal of the assessee ex-parte by upholding the assessment order passed by the AO by holding that the material on record is not sufficient to allow any relief to the assessee. The ld. CIT(A) issued as many three notices to the assessee as stated in appellate order but there was no compliance by the assessee. It is also observed that the aforesaid three notices were issued by ld. CIT(A) in quick succession within short period of time from 04.07.2025 to 25.07.2025 , and thereafter appeal was adjudicated by ld. CIT(A) for non compliance by the assessee. Principles of natural justice are clearly breached. The ld. CIT(A) simply dismissed the appeal of the assessee by a non-speaking cryptic order wherein it was held that the material on record is not sufficient to allow any relief to the assessee, and upheld the assessment order without deciding the issues arising in the appeal on merits as well on legal/jurisdictional ground raised by the assessee, mainly on account of non compliance by the assessee to the three notices issued by ld. CIT(A). The appellate order passed by ld. CIT(A) is reproduced in the preceding para’s of this order and is not repeated again. Even, there is no mention as to the service of the notices being effected by ld. CIT(A) on to the assessee. The notices are issued in quick succession between 04.07.2025 to 25.07.2025 i.e. within 22 days. The ld. CIT(A) is required and obligated to pass appellate order in compliance with the provisions of section 250(6), as ld. CIT(A) is required to pass reasoned and speaking order on merits in accordance with law. Even jurisdictional/legal issues raised by the assessee are not adjudicated by ld. CIT(A). The assessee has raised this ground of non compliance of provision of Section 250(6) of the 1961 Act by ld. CIT(A), vide ground number 12. Reference is drawn to provisions of Section 250(6), wherein ld. CIT(A) has to state point for determination, his decision and reasons thereof. There were as many as 17 grounds of appeal raised by the assessee before ld. CIT(A) which required adjudication, which were not done by ld. CIT(A). The appellate order passed by ld. CIT(A) is subject to further appeal with ITAT u/s 253. The appellate order passed by ITAT is subject to further appeal before Hon’ble High Court u/s 260A. The judgment and order passed by Hon’ble High Court is also subject to challenge before Hon’ble Supreme Court. Thus, the appellate order passed by ld. CIT(A) is not a final order, as it is subject to challenge before higher appellate authority. Thus, Reasons which weighed in the minds of the adjudicating authority while adjudicating appeal on merits of the issues and/or legal jurisdictional grounds raised by the assessee are cardinal as the higher appellate authority can then adjudicate appeal on the issues arising in appeal before them, based on decision and reasoning of ld. CIT(A) in deciding the issues. If the ld. CIT(A) simply dismiss the appeal merely because the assessee did not comply with the notices issued by ld. CIT(A) without adjudicating issues arising in the appeal on merits as well legal/jurisdictional grounds , such order is not sustainable in the eyes of law keeping in view provisions of Section 250(6) , and also higher appellate authorities will be deprived to see what weighed in the mind of the ld. CIT(A) while adjudicating appeal as it will be an order passed without reasoning on the issues on merits and /or on legal/jurisdictional challenge by the assessee . The appellate order of the CIT(A) is clearly in violation of section 250(6) of the Act and liable to be set aside. Merely stating the assessment order passed by AO is upheld and does not warrant interference is not sufficient, and that the assessee has not submitted details/documents during appellate proceedings is not sufficient. The ld. CIT(A) is not toothless as his powers are co-terminus with the powers of the AO, which even includes power of enhancement. The ld. CIT(A) can make enquiries as may deemed fit as contemplated u/s 250(4). It is equally true that the assessee also did not complied with the notices issued by ld. CIT(A) and did not file the requisite details/documents to support his contentions. Thus, the assessee is equally responsible for its woes as the assessee did not comply with the notices issued by the ld. CIT(A). Thus, the assessee is equally to be blamed for its woes. Keeping in view the entire factual matrix as culled out above in the preceding para’s of this order, it will be fair and equitable for both the parties as well in the interest of justice, that the appellate order of ld. CIT(Appeals) be set aside and the matter be remanded back to the file of ld. CIT(Appeals) for fresh adjudication after giving proper opportunity of being heard to both the parties w.r.t. the issues arising in the appeal .The assessee is directed to comply with the notice issued by ld. CIT(Appeals) during the appellate proceedings in set aside remand proceedings, otherwise ld. CIT(A) shall be free to decide the appeal ex-parte on merits in accordance with law, after complying with provisions of Section 250(6). I clarify that I have not commented on merits of the issues. Thus, the appellate order passed by ld. CIT(A) is set aside and matter is restored back to the file of ld. CIT(A) for fresh adjudication. The appeal of the assessee is allowed for statistical purposes. I order accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.